New mining code in Burkina Faso should not affect current operations — Iamgold

Burkina Faso’s upcoming vote on an updated mining code, which would abolish a previous 10% tax break on miners’ profits, obliging companies to pay into a local, should not have a material impact on Iamgold Corp.’s (TSX:IMG)(NYSE: IAG) Essakane gold mine, the company said Monday.

According to the Toronto-based firm, Essakane already has fiscal stability clauses in its mining convention and the code, which is yet to be formalized into law, is nothing but positive as it reduces regulatory uncertainty, respecting clauses in existing deals.

The West African country’s authorities are likely to approve the new code, which replaces 12-year-old mining regulations, as its adoption was among requirements set by the World Bank for the release of $100 million in budget support for the nation.

Burkina Faso is Africa's No.4 gold producer and the precious metal accounts for about 20% of gross domestic product.

Other than Iamgold, there are roughly two dozen miners operating in the country, including Semafo and Avocet Mining.